Ombudsman ruling – Dread disease claim paid for the second time

Although a dread disease claim under a group risk policy was declined as the claim for the same condition was paid by a previous underwriter, the Ombudsman for Long-Term Insurance recently ordered Alexander Forbes to pay a life assured for dread disease after the client had been diagnosed with cancer a second time.

About the case:

A woman was covered under her employer’s group risk policy for dread disease. During 2013 the woman was diagnosed with localised breast cancer and a claim was paid by the “previous insurer” as the policy was previously underwritten by another insurer. She underwent a mastectomy on 16 September 2014 followed by radiation therapy and hormonal blockade without evidence of metastases.

From 1 May 2015 the group risk policy was underwritten by Alexander Forbes. On 22 October 2015 the woman was diagnosed with liver metastases and stage IV breast cancer. She submitted a claim to Alexander Forbes, but the claim was declined.